Dunnet Properties Pty Limited v Cussen - [2009] NSWSC 961

CITATION: Dunnet Properties Pty Limited v Cussen [2009] NSWSC 961

HEARING DATE(S): 3 September 2009

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 3 September 2009

DECISION: See paragraphs [43] and [44] of the judgment.

CATCHWORDS: COSTS – security for costs – of claim and cross-claim – where almost identical issues on each – where only separate and substantive issue likely to be postponed – whether to exercise discretion in favour of orders sought.

CATEGORY: Procedural and other rulings

CASES CITED: Corporations Act 2001
Trade Practices Act
Uniform Civil Procedure Rules

PARTIES: Dunnet Properties Pty Limited (First Plaintiff)
Australian Education Advancement Pty Limited (Second Plaintiff)
Neil Robert Cussen (First Defendant)
Global College Pty Limited (In liquidation) (Second Defendant)

FILE NUMBER(S): SC 50243/08

COUNSEL: M A Friedgut (Plaintiff)
R D Glasson (Defendant)

SOLICITORS: Addisons Lawyers (Plaintiffs)
Parry Carroll (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

3 September 2009 (ex tempore – revised 7 September 2009)

50243/08 DUNNET PROPERTIES PTY LIMITED & 1 ORS v NEIL ROBERT CUSSEN & 1 ORS

JUDGMENT

1 HIS HONOUR: There are before the Court two applications for security for costs. One application is brought by the defendants against the plaintiffs. The other is brought by the cross-defendants (who are the plaintiffs in the action) against the cross-claimants (who are the defendants in the action). Each application is brought on the basis that the respondents to it are unlikely to be able to pay the applicants’ costs, if called upon to do so (see s 1335 of the Corporations Act 2001, and UCPR r 42.21).

2 The proceedings arise out of the collapse of the second defendant Global College Pty Limited (Global) and an agreement made on 23 May 2008 whereby the plaintiffs agreed to buy the issued shares in Global. The first defendant and second cross-claimant, Mr Cussen, was then the administrator of Global and is now its liquidator. He too was a party to the agreement.

3 Completion of the agreement was to take place on 30 June 2008. A first instalment of the purchase price was paid, in the sum of $100,000. The balance was payable in accordance with cl 5.1 of the agreement. In addition, the plaintiffs, as purchasers, were to pay the costs of running Global’s business until completion.

4 There were a number of conditions precedent to the obligations of the parties to complete. One of those (cl 2.1(i)) was that the plaintiffs should complete their due diligence into Global and the assets and shares being sold and be reasonably satisfied with their findings.

5 The plaintiffs carried out their due diligence and apparently formed the view that they were not satisfied with the outcome. Accordingly, on 26 June 2008, they gave notice of that and rescinded, the agreement. They called, among other things, for return of the first instalment.

6 Mr Cussen took a different view. He said that the plaintiffs were not entitled to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dunnet Properties Pty Limited v Cussen

Details

AGLC: Dunnet Properties Pty Limited v Cussen [2009] NSWSC 961
Case: [2009] NSWSC 961
Decision Date: 3 September 2009

CaseChat Overview and Summary

Dunnet Properties Pty Limited was involved in a legal dispute with Cussen, with both parties filing claims and cross-claims. The case revolved around the issue of security for costs, specifically whether Dunnet Properties should be required to provide security for the costs of Cussen's cross-claim. The matter was heard in the Supreme Court of New South Wales. The central legal question was whether the court should exercise its discretion to require Dunnet Properties to provide security for Cussen's cross-claim costs, given the similarity of issues between the claim and cross-claim.

The court considered whether the claims and cross-claims raised almost identical issues, with the only separate and substantive issue likely to be postponed until a later stage of the proceedings. The court noted the principle that the discretion to order security for costs should be exercised sparingly and only in cases of clear necessity. Given the similarity of issues, the court found that the discretion should not be exercised in favour of the orders sought by Cussen.

In light of the court's reasoning, Dunnet Properties was not required to provide security for the costs of Cussen's cross-claim. The court's decision was based on the principle that the discretion to order security for costs should be exercised sparingly and only in cases of clear necessity, which was not present in this case due to the similarity of issues between the claim and cross-claim. The final orders reflected the court's decision not to require Dunnet Properties to provide security for Cussen's cross-claim costs.

Orders